Correlation Between DONGKUK TED and Bukwang Pharm
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED and Bukwang Pharm at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DONGKUK TED and Bukwang Pharm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGKUK TED METAL and Bukwang Pharm, you can compare the effects of market volatilities on DONGKUK TED and Bukwang Pharm and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DONGKUK TED with a short position of Bukwang Pharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and Bukwang Pharm.
Diversification Opportunities for DONGKUK TED and Bukwang Pharm
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DONGKUK and Bukwang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and Bukwang Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukwang Pharm and DONGKUK TED is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DONGKUK TED METAL are associated (or correlated) with Bukwang Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukwang Pharm has no effect on the direction of DONGKUK TED i.e., DONGKUK TED and Bukwang Pharm go up and down completely randomly.
Pair Corralation between DONGKUK TED and Bukwang Pharm
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to under-perform the Bukwang Pharm. But the stock apears to be less risky and, when comparing its historical volatility, DONGKUK TED METAL is 1.14 times less risky than Bukwang Pharm. The stock trades about -0.2 of its potential returns per unit of risk. The Bukwang Pharm is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 512,000 in Bukwang Pharm on September 2, 2024 and sell it today you would lose (42,000) from holding Bukwang Pharm or give up 8.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. Bukwang Pharm
Performance |
| Timeline |
| DONGKUK TED METAL |
| Bukwang Pharm |
DONGKUK TED and Bukwang Pharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and Bukwang Pharm
The main advantage of trading using opposite DONGKUK TED and Bukwang Pharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED position performs unexpectedly, Bukwang Pharm can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bukwang Pharm will offset losses from the drop in Bukwang Pharm's long position.| DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. LG Energy Solution | DONGKUK TED vs. SK Hynix |
| Bukwang Pharm vs. Samyung Trading Co | Bukwang Pharm vs. Daiyang Metal Co | Bukwang Pharm vs. E Investment Development | Bukwang Pharm vs. DONGKUK TED METAL |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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